Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2021, Pilot Co. acquired 80% of Sailor Co. for $216,000. Saltor reported a book value of stockholders' equity of $140,000 (including common

image text in transcribed
image text in transcribed
image text in transcribed
On January 1, 2021, Pilot Co. acquired 80% of Sailor Co. for $216,000. Saltor reported a book value of stockholders' equity of $140,000 (including common stock of $72,000 and retained earnings of $68,000) on that date. On the acquisition date, the fair value of the 20% non-controlling interest was $54,000. On the acquisition date, a trademark (6-year remaining life) was undervalued on Sailor's records by $57,000. Any remaining excess of cost over book value is attributed to goodwill. The consolidation worksheet for the year ended December 31, 2022 (i.e. the second year) is provided below. The equity method is used by Pilot. Requirement: Record the consolidation entries S.A.J. D. and E for 2022 (Year 2) in the worksheet. Place the letter before each amount. (21 points, 1.5 point each entry) Format BI U Accounts Pilot Co. Revenues Amortization Expense Equity in Subsidiary earnings Net income ($380,000) 292,000 (50,800) (138,800) Consolidation entries Sailor Co. Debit Credit ($158,000) 85,000 9500 0 58400 (73,000) Font Famil Font Stre Accounts Revenues Amortization Expense Equity in Subsidiary earnings Net income Pilot Co. ($380,000) 292,000 (50,800) (138,800) Comodation entries Sailor Co Credit ($ 158,000) 85,000 9500 58400 73,000) Retained Earnings, 1/1/2022 Net Income Dividends declared Retained Earnings, 12/31/2022 ($789,500) (138,800) 84,000 (844,300) ($107.000) (73,000) 15,000 12000 (165,000 Current Assets Investment in Sailor Co. $635,000 278,400 1 106,000 0 12000 Trademark Goodwill Total Assets 378,050 0 $1,291,450 139,000 0 $245,000 9500 ($82,250) ($8,000) Liabilities Non-controlling interest Common Stock Retainer Farnings 1/31/2022 (364,900) TR44 anoil (72,000) 72000 1165 annil hann 11 Equity in Subsidiary earnings Net income (50) (188,800) OSBO (73000) Retained Earnings, 1/1/2022 Net Income Dividends declared Retained Earnings, 12/31/2022 ($789,500) (138,00) 84,000 (844,300) ($107.000) (73.000) 15,000 12000 (165,000) Current Assets Investment in Sailor Co. $635,000 278,400 106,000 0 12000 Trademark Goodwill Total Assets 378,050 0 $1,291,450 139,000 0 $245,000 9500 ($82,250) ($8,000) Liabilities Non-controlling interest Common Stock Retained Earnings 12/31/2022 (364,900) (844,300) (72,000) 22000 (165,000) 68000 (5) Total Liab. and S/E ($1,291,450) ($245,000)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Practical Guide To Auditing SAP Systems

Authors: Martin Metz, Sebastian Mayer

1st Edition

3960126409, 978-3960126409

More Books

Students also viewed these Accounting questions

Question

=+. Let 2 be the unit square [(x, y): 0 Answered: 1 week ago

Answered: 1 week ago

Question

Compare levels of resolution in conflict outcomes?

Answered: 1 week ago

Question

Strategies for Managing Conflict Conflict Outcomes?

Answered: 1 week ago